Google is the latest tech company, following Twitter, Slack and others, to signal that the current remote work trend will stretch deep into 2021 — with some allowing permanent remote work. As a result, Bay Area rents near some of the biggest tech offices are dropping significantly, according to a new study from realtor.com.
Denser counties close to big tech companies are seeing significant year-over-year rent decreases, with San Francisco experiencing a 7.4 percent decline for both one- and two-bedroom apartments in July, while San Mateo saw a 9.6 percent decline for one-bedrooms and an 8.1 percent decline for two-bedrooms. Santa Clara experienced a 4.4 percent decline for one-bedrooms and a 5.3 percent decline for two-bedrooms.
“Before the pandemic, rental communities along the peninsula and in close proximity to the big tech headquarters were benefiting from inelastic demand as shorter (often walkable/bikeable) commutes drew waves of high-earners into the area,” Javier Vivas, realtor.com’s director of economic research, said in a statement.
Counties further from those big tech companies — that traditionally require a longer commute — are conversely seeing rents rise, as more and more city dwellers look for space. Alameda, Marin, Contra Costa and San Joaquin, are all seeing rents rise with the median price per square foot between 1 percent and 7 percent for one-bedrooms and between 2 percent and 10 percent for two-bedrooms.
“The divergence in rent growth is reflective of softening interest in the more expensive closer-in counties that has increasingly spilled over into the more inexpensive outlying counties,” Vivas said. “As remote work becomes more prevalent in the upcoming months, and more pre-COVID leases expire we should expect further balancing.”
New York rents dropped 1 percent from June to July and down 2.4 percent year over year. Median rents in New York are currently $2,094 for a one-bedroom and $2,494 for a two-bedroom. It’s the fourth straight month the city saw rent decrease.